Wolfe v. Anne Arundel County

MOYLAN, Judge. Erin Jones Wolfe, the appellant, challenges a ruling of the Circuit Court for Anne Arundel County, Judge Eugene M. Lerner presiding, whereby the court granted Motions for Summary Judgment in favor of Anne Arundel County, the appellee, on all three counts of the claim filed against it. On appeal Ms. Wolfe claims that the circuit court improperly granted those motions. The County raises one issue by way of cross-appeal, to wit, that two counts of the claim against it were barred by res judicata or collateral estoppel.

Background In March of 1993, Ms. Wolfe initiated a lawsuit in the Circuit Court against (1) Michael D. Ziegler, an Anne Arundel County police officer; (2) Anne Arundel County (“the County”); and (3) various officials of the County Police Depart ⁵ ment. The suit sought damages for battery and for a violation of Ms. Wolfe’s federal civil rights. It stemmed from an •incident which occurred at approximately 2:00 a.m. on November 15, 1990, when Ziegler, while in uniform and on duty, pulled Ms. Wolfe over for a routine traffic stop and thereafter forcibly raped her. The County had the suit removed to the United States District Court for the District of Maryland.

The suit was then bifurcated, with the claims against Ziegler being tried first before the trial of the claims against the County and its officials. Ziegler requested that the County, which is self-insured, provide him with funding for a legal defense. Accordingly, the County, with a reservation of rights, provided Ziegler his requested defense. In a letter sent to Ziegler on March 29, 1998, counsel for the County wrote in relevant part: We are reserving our right to later disclaim any obligation under the insurance coverage and the Local Government Tort Claims Act, and to assert a defense of no coverage because the actions alleged in the lawsuit, if proved, would constitute intentional wrongdoing and would constitute actions not within the scope of your employment with the Anne Arundel County Police Department!.] The letter further instructed Ziegler to select his own defense counsel rather than to retain the same counsel as the County, because of the “potentially adverse interests between IZiegler] and the County.” On September 21, 1994, a federal jury returned a verdict in favor of Ms. Wolfe and against Ziegler in the first phase of the case.

Ms. Wolfe was awarded a total of $1,050,000 in damages plus costs, $650,000 of which was compensatory and $400,000 of which was punitive. Ziegler thereafter submitted a claim for indemnification to the Anne Arundel County Self-Insurance Fund Committee (“the Committee”). A hearing was held on May 10, 1995, and the Committee denied Ziegler’s claim for indemnification on the ground that “the act which resulted in the jury’s verdict was not within the scope of ... employment; that act, whether consensual or not, was the act of sexual ⁶ intercourse, which hardly can be described as incident to [Ziegler’s] duties as a police officer.” Ziegler appealed the Committee’s decision to the Anne Arundel County Board of Appeals which, after considering the claim de novo, affirmed the Committee’s decision in all aspects on January 31, 1996. In the second phase of the bifurcated proceedings against the County and its officials, in September of 1994 the District Court granted summary judgment in favor of the remaining defendants on all counts.

The Instant Case In November of 1997 Ms. Wolfe filed an action for declaratory relief against the County in the Circuit Court for Anne Arundel County. Shortly thereafter, Ziegler assigned to Ms. Wolfe any and all causes of action he might have had against the County arising out of the County’s refusal to provide him with indemnification. Ms. Wolfe then filed an “Amended Complaint and Claim for Declaratory Judgment,” in which she sought relief under three separate counts. Those counts were: I. A declaratory judgment that Ms. Wolfe was legally entitled, pursuant to the Insurance Article of the Maryland Annotated Code, to indemnification benefits of the County’s insurance policy; II.

That, as the assignee of Ziegler, Ms. Wolfe was entitled to judgment in her favor based on the County’s having acted in bad faith and breaching its duties to Ziegler in refusing to “make any meaningful offer of settlement of the plaintiffs claims;” and III. That, in encouraging Ziegler to proceed with a jury trial in federal court rather than settle the claim, the County was estopped from denying coverage to Ziegler and in turn to Ms. Wolfe, as Ziegler’s assignee. The County, in response, filed a “Motion to Dismiss or, Alternatively, for Summary Judgment” asserting various defenses to the suit. ⁷ Following a hearing, the circuit court issued an Order on August 3,1998, which disposed of Counts II and III: The Motion to Dismiss Counts II and III of the Amended Complaint on the ground that the allegations set forth in those Counts fail to state claims upon which relief can be granted is GRANTED, and summary judgment shall be entered in favor of Anne Arundel County as to Counts II and III. Subsequently, both parties sought summary judgment as to the only remaining Count (Count I) of the Amended Complaint.

After a hearing, the circuit court granted summary judgment in favor of the County. In a footnote to its October 8,1999, Order the court explained: This Court is bound by the settled law found in Cox v. Prince George’s County, 296 Md. 162, 165 , 460 A.2d 1038, 1039-40 (1983). Plaintiff in this action has not met the two-prong test in order to hold the County liable for the acts of Officer Ziegler. To explain, although Plaintiff has shown that at one time a master-servant relationship existed between the County and Officer Ziegler, Plaintiff has not demonstrated “that the offending conduct occurred within the scope of the employment of the servant or under the express or implied authorization of the master.” Cox, 296 Md. at 165 , 460 A.2d at 1039-40 .

For this reason, the Court must deny Plaintiffs motion for summary judgment. Finding that no material fact is in dispute and that Defendant is entitled to judgment as a matter of law, in accordance with Maryland Rule 2-501, Defendant is hereby granted summary judgment as to Count I of the complaint. (Emphasis supplied). This timely appeal followed.

The Motion for Summary Judgment In reviewing a grant of summary judgment, an appellate court has the same information and decides the same issues of law as the trial court. It follows then that the proper standard for reviewing the granting of a sum ⁸ mary judgment motion should be whether the trial court was legally correct. Heat & Power Corp. v. Air Products & Chemicals, Inc., 320 Md. 584, 590 , 578 A.2d 1202 (1990); Warner v. German, 100 Md.App. 512, 516-17 , 642 A.2d 239 (1994). Count 1: “Injured Person” Versus “Insured’s Insurer” The key issue in this case is the propriety of the grant of Summary Judgment in favor of the County on the first count of the Complaint.

That count was brought by Ms. Wolfe in her own right against the County in its capacity as the alleged insurer of Ziegler. It was brought under Md.Code, Insurance Article, Sect. 19-102(b)(2), which provides, in pertinent part: (b) Bankruptcy or insolvency of insured.—Each liability insurance policy issued in the State shall provide that: (2) if an injured person ... is unable after execution on a final judgment entered in an action against an insured, to recover the full amount of the final judgment, the person may bring an action against the insured’s insurer in accordance with the terms of the policy for the lesser of the amount of the judgment recovered in the action against the injured or the amount of the policy. (Emphasis supplied). In the instant case, Ms. Wolfe obtained a judgment against the insured, i.e., Ziegler, slightly in excess of $1 million.

We are fully satisfied that under the standing guidelines articulated by Judge Eldridge in Harford Mutual v. Woodfin, 344 Md. 399, 411-14 , 687 A.2d 652 (1997), this case was ripe for Ms. Wolfe to bring her claim against the County. Indeed, the County does not contest her standing to bring the action nor the ripeness of the claim, but is content to defend its position on the merits. The County’s position is that, under Sect. 19-102(b)(2), Ms. Wolfe is only entitled to recover “in accordance with the terms of the policy” and that, under the terms of the policy, there was no coverage for the tortious acts of Ziegler. ⁹ The Source of the Coverage The source of Ziegler’s liability coverage is in the twin requirements of the Local Government Torts Claims Act, now codified as Maryland Code, Courts and Judicial Proceedings Article, Sects. 5-302 and 5-303, and in the implementation of those obligations by Anne Arundel County. There is the broad obligation on the County to defend and a narrower obligation to indemnify a county employee sued for a tortious act committed in the scope of his employment.

The Duty to Defend Section 5-302 of the Courts and Judicial Proceedings Article, entitled “Nature and extent of legal representation,” provides in pertinent part: (a) Government to provide legal defense to employees.— Each local government shall provide for its employees a legal defense in any action that alleges damages resulting from tortious acts or omissions committed by an employee within the scope of employment with the local government. See Ennis v. Crenca, 322 Md. 285, 291-92 , 587 A.2d 485 (1991). By way of implementing that obligation to defend, section 526(b) of the Anne Arundel County Charter (“Charter”), entitled “Powers and duties of the County Attorney,” provides in relevant part: (b) Subject to any limitation or exception that the County Council specifies by ordinance, the County Attorney shall defend any officer or employee of the County in any civil action brought against the officer or employee by reason of any act done or omitted to be done in the scope of the officer’s or employee’s employment. In any case defended by the County Attorney under this section, the County shall pay all court related expenses charged to the officer of employee.

There is no problem in this case with respect to the County’s obligation to defend. Ziegler was sued for tortious conduct allegedly committed in the scope of his employment and ¹⁰ the County picked up the full cost of his defense. The duty to defend is triggered by the allegations in the Complaint. The Duty to Indemnify The battleground in this case is the County’s obligation to indemnify.

That obligation depends on the scope of the coverage. It is the County’s position that it is, by the express terms of the coverage, not the insurer for its employee’s tortious acts generally but only for those tortious acts that are committed “within the scope of his employment.” Section 5-303 of the Courts and Judicial Proceedings Article explicitly sets forth the extent of the local government’s responsibility for liability in a tort action: (b) When government liable.—(1) Except as provided in subsection (c) of this section, a local government shall be liable for any judgment against its employee for damages resulting from tortious acts or omissions committed by the employee within the scope of employment with the local government.... (c) Punitive damages; indemnification.—(1) A local government may not be liable for punitive damages. (Emphasis supplied).

As a self-insured jurisdiction, the County has, by ordinance, created a “Self-Insurance Fund.” One of the attendant requirements is that the County adopt and enact a series of rules and regulations necessary for the operation of the Fund. See Anne Arundel County Code, Art. 2, § 5-104(d)(3). In its rules and regulations, the County’s Self-Insurance Fund expressly defines the “Insured” who will receive general liability coverage. INSURED: 1.

All ... employees ... of the County, ... while acting within the scope of their duties as such or on behalf of the County. ¹¹ (Emphasis supplied). Those same rules and regulations also expressly spell out certain conduct by an employee which is “Excluded” from coverage: EXCLUSIONS: 2. Claims brought against an individual County employee or individual otherwise insured which are as a result of toilful actions or gross negligence on the part of that individual. 9. Punitive damages for or on behalf of any public official or employee of the County who is a defendant in a civil rights action.

(Emphasis supplied). Article 13 of the Collective Bargaining Agreement entered into between the County and the Fraternal Order of Police also lists the specific insurance coverages available to County police officers. Section 13.6 provides: Civil Liability Coverage County agrees to provide employees with legal defense services and with indemnification for civil liability in a fashion consistent with both Article 2, Title 5 (Self-Insurance Fund) of the County Code and the policies, rules and regulations of the self-insurance fund committee. County agrees to provide employees with legal defense services and legal counsel without cost in any civil case where the plaintiff alleges that an officer should be held liable for acts alleged to be within the scope of his/her employment and/or his/her official capacity.

Indemnification of compensatory damages will also be provided to any ¹² member of the unit who is made a defendant in litigation arising out of acts within the scope of his/her employment. (Emphasis supplied). Officer Ziegler’s Conduct And the Scope of His Employment All of the preceding statutes predicate the entitlement to insurance coverage on the fact of the tortious acts’ being done “within the scope of employment.” The tortious conduct in question in this case is, of course, the conduct on which the federal judgment against Ziegler was based. That conduct was summarized in the opinion of the Fourth Circuit affirming the judgment.

Jones v. Wellham, 104 F.3d 620, 622 (4th Cir.1997). In the early morning of November 15, 1990, Officer Ziegler stopped a pickup truck driven by Ms. Jones, then age 28, on ostensible suspicion of driving while intoxicated. After questioning and observing Jones, Ziegler asked her to get into his police cruiser, told her that he would not arrest her, and said that he would drive her home. He did not, instead driving past the turnoff to her house and into a church parking lot.

When Jones questioned him as to why he had gone past her house, Ziegler explained that he had to check something at the church. Ziegler got out of the car at the church, and removed some of his clothing. According to Jones, when he returned to the car, he forcibly removed Jones’ underwear and then forced her to have sex with him. Id. at 622 .

That was the conduct on which the judgment against Ziegler was based. The conduct itself is no longer in issue. It was only because of her inability to collect the judgment against Ziegler directly that Ms. Wolfe has attempted, through § 19—102(b)(2) of the Insurance Article, to collect it from the County. In granting summary judgment on the first count in favor of the County, Judge Lemer ruled, as a matter of law, that Ziegler’s raping of Ms. Wolfe was not within the ¹³ scope of his employment.

For that reason, Ziegler’s conduct was not covered by the liability insurance provided by the County. We affirm that ruling. For a definition of the phrase “within the scope of employment,” Judge Lerner relied on the Court of Appeals decision in Cox v. Prince George’s County, 296 Md. 162 , 460 A.2d 1038 (1983). In that case, Cox filed an action for declaratory relief on the issue of whether the actions of Prince George’s County police officers in “maliciously and intentionally” allowing and encouraging a police trained canine to attack Cox were within the scope of the officers’ employment.

Judge Cole first set forth the relevant law on the subject: It is settled law, and fundamental to the concept of vicarious liability under the doctrine of respondeat superior, that the tortious actor must be the servant or agent of the one sought to be held liable, that is, that a master-servant or principle/agent relationship must exist. Once this first step is established, then the plaintiff must show that the offending conduct occurred within the scope of the employment of the servant or under the express or implied authorization of the master. 296 Md. at 165 , 460 A.2d 1038 (emphasis supplied). Although Cox v. Prince George’s County was concerned with agency principles rather than with insurance coverage, it shares with the present case the common denominator of determining vicarious liability by mapping out the scope of an employee’s employment. [Wjhen a county has waived its governmental immunity, it is responsible under the doctrine of respondeat superior for the tortious acts of its employees which occur in the course of their employment. 296 Md. at 169 , 460 A.2d 1038 (emphasis supplied). In order to determine which acts are and which are not considered to be “within the scope of employment,” the following analysis was employed: [T]he master is responsible for the wrongful acts of his servant, even though they be wilful, or l-eckless, if the act ¹⁴ done by the servant be within the scope of his employment, and in furtherance of his master’s business....

The simple test for determining vicarious liability under the principle of respondeat superior “is whether they were acts unthin the scope of his employment; not whether they were done while prosecuting the master’s business, but whether they were done by the servant in furtherance thereof, and were such as may fairly be said to be authorized by him.” 296 Md. at 170 , 460 A.2d 1038 (emphasis supplied). And see Sawyer v. Humphries, 322 Md. 247, 254 , 587 A.2d 467 (1991) (“Scope of public duties” synonymous with “scope of employment” for purposes of analysis.) See also Ennis v. Crenca, 322 Md. 285 ; 293-96, 587 A.2d 485 (1991) (Scope of employment determined by whether “conduct was in furtherance of the [master’s] business and incidental to it[.]”) Sawyer v. Humphries listed a number of factors to be considered when determining whether a public official was acting within the scope of his public duties: To be within the scope of the employment the conduct must be of the kind the servant is employed to perform and must occur during a period not unreasonably disconnected from the authorized period of employment in a locality not unreasonably distinct from the authorized area, and actuated at least in part by a púrpose to serve the master. ... “In determining whether or not the conduct, although not authorized, is nevertheless so similar to or incidental to the conduct authorized as to be within the scope of employment, the following matters of fact are to be considered:— (a) whether or not the act is one commonly done by such servants; (b) the time, place and purpose of the act; (c) the previous relations between the master and the servant; (d)the extent to which the business of the master is apportioned between different servants; (e) whether the act is outside the enterprise of the master or, if within the enterprise, has not been entrusted to any servant; (f) whether or ¹⁵ not the master has reason to expect that such an act will be done; (g) the similarity in quality of the act done to the act authorized; (h) whether or not the instrumentality by which the harm is done has been furnished by the master to the servant; (i) the extent of departure from the 'normal method of accomplishing an authorized result; and (j) whether or not the act is seriously criminal.” [Restatement of Agency, § 229 (1933) ]. 322 Md. at 255-56, 587 A.2d 467 (emphasis supplied). Sawyer finally noted that “ ‘where the conduct of the servant is unprovoked, highly unusual, and quite outrageous, courts tend to hold that this in itself is sufficient to indicate that the motive was a purely personal one’ and the conduct outside the scope of employment.” Id. at 257, 587 A.2d 467 (quoting Prosser and Keaton On the Law of Torts, 605). We affirm the granting of summary judgment in favor of the County on the first count.

The Second and Third Counts The County’s motion aimed at the second and third counts was styled a “Motion to Dismiss or, in the Alternative, a Motion for Summary Judgment.” The court order of July 31, 1998, granting the motion, used the language “The Motion to Dismiss Counts II and III ... is Granted.” The court had, however, reviewed and considered a number of exhibits submitted by each side. Under the circumstances, the rejection of the two counts was more properly the granting of a Motion for Summary Judgment than a Motion to Dismiss. In Boyd v. Hickman, 114 Md.App. 108, 116-18 , 689 A.2d 106 (1997), Judge Hollander explained: Appellee filed motions to dismiss and, in the alternative, motions for summary judgment. As a preliminary matter, we must determine which motion was actually granted.

The trial court’s memorandum opinion and the docket sheet refer to the disposition as a grant of the motion to dismiss ... Appellees note, however, that the trial judge considered materials outside the pleadings, and therefore urge us to ¹⁶ treat the order as the grant of a motion for summary judgment. ... When the circuit court considers matters outside the pleadings, the court treats the matter as a motion for summary judgment, and the legal effect of the ruling in favor of the moving party is to grant a motion for summary judgment notwithstanding the court’s designation of the ruling as a motion to dismiss. Although the circuit court’s memorandum opinion stated that it granted the defendants’ “motion to dismiss,” the circuit court clearly considered the affidavits and other materials submitted by the defendants....

Therefore, the circuit court’s consideration of matters outside the pleadings rendered its decision to grant a motion for summary judgment. (Citations omitted; footnote omitted; emphasis supplied). Ms. Wolfe brought her suit under the second and third counts in her express capacity “as Assignee of Michael D. Ziegler.” She alleged that he “has assigned the claims which are set forth in Counts II and III of this Complaint” to her. Her entitlement to prevail on the counts is, ipso facto, based on his hypothetical entitlement to prevail.

Count II charged that the County acted “in bad faith” when it failed to make a meaningful effort to settle Ms. Wolfe’s claim against Ziegler. Count III charged that the County, by undertaking to provide a defense for Ziegler, was estopped from denying its obligation to indemnify him. A. Count II: The Failure to Attempt to Settle the Claim With respect to some alleged failure of the County to attempt to settle the claim, Ms. Wolfe’s argument is fatally flawed in two separate regards. It is clear the Ziegler’s conduct was not within the scope of his employment and that the County, therefore, had no liability and no duty to indemnify.

The County steadfastly maintained at all times that it had no such liability. It has furthermore turned out that it was absolutely correct in maintaining that position. Under the ¹⁷